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AIFMD patchwork 'will deter' non-EU firms
10 December 2013
Sturgeon Ventures creates service to help AIFs cope with varying rules across the EU markets
Sturgeon Ventures has launched a new service to help alternative investment funds (AIFs) cope with the “patchwork quilt” of rules emerging under the EU Alternative Investment Fund Managers (AIFM) directive.
The firm believes that non-European funds are likely to be deterred from trying to operate in the EU due to the variance in how member states treat the inward marketing of AIFs.
The National Private Placement Regime enables fund managers to market hedge funds in the EU that are ineligible for passporting under the AIFM directive, either because they originate outside the European Economic Area or they are managed by non-EEA managers.
Figures from E&Y show that around 17 of the EU member states intend to allow some form of private placement, while others have even yet to announce their intentions.
Sturgeon predicts that in particular US hedge funds domiciled in the Cayman Islands will give up trying to run in the EU as a result of these difficulties.
“The market is frustrated with the current uncertainty in the EU and regards the AIFMD as having created some increased operational headaches in getting funds into the EU. These issues cannot be ignored but at the same time they are not insurmountable and Sturgeon’s new service does offer a solution,” said Jake Green, senior associate at Ashurst, the regulatory legal firm.
Sturgeon’s new service enables AIFs to produce bespoke submissions that meet each country’s regulatory requirements.
Seonaid Mackenzie, managing partner at Sturgeon, said: “We believe we are the first regulatory incubator or ‘umbrella’ to provide this service. We are working with a number of law firms that that can draft the relevant appendices to current offering memorandums in line with the different jurisdictions. We can update our service almost as fast as countries can announce their new regimes.”